Alibaba announces major shakeup, reorganizes business units for separate IPO

Asian Tech Press (Mar 28) -- Chinese e-commerce giant Alibaba is reorganizing itself into six major business units that can raise capital and launch an IPO when they are ready.

Alibaba Chairman and CEO Daniel Zhang announced Tuesday the launch of what he called "1+6+N" organizational restructuring in an email to all employees.

Under Alibaba Group Holding Ltd., the Chinese tech giant will set up six business groups and several subsidiaries, including Alibaba Cloud Intelligence, Taobao & Tmall Commerce, Local Life Service, Cainiao, Global Digital Commerce and Big Entertainment.

Business groups and subsidiaries will have separate boards of directors, each of which will be headed by a CEO under the leadership of their own board of directors, while Alibaba Group will be fully managed as a holding company, according to Zhang.

In the letter, Zhang said, "The market is the best touchstone. And in the future, business groups and subsidiaries that have the conditions will have the possibility of independent financing and listing."

This round of changes started from the top of the Group, and Zhang called it "the most important organizational change in Alibaba's 24 years."

As market news of Alibaba's reorganization of its business units spreads widely across the Chinese Internet, Jack Ma, the billionaire founder of the e-commerce giant, his return to mainland China after more than a year of overseas travel, is also garnering much attention.

Founded in 1999, Alibaba has reorganized its structure several times as it continues to expand its business footprint.

Starting in the fourth quarter of 2021, Alibaba has reorganized its main businesses into seven categories, including China Commerce, International Commerce, Local Consumer Services, Digital Media and Entertainment, Innovation Initiatives and Others, Logistics and Cloud.

Alibaba's organizational restructuring, along with Jack Ma's return, appears to send a positive signal that confidence in China's private sector is beginning to revive.

Tighter regulations in China over the past two years in various sectors, including real estate, Internet platforms and education, have dampened the investment climate for private companies.

The news comes after Ma declined an invitation from the Chinese government to return to mainland China, saying he would focus on the research of agricultural technology.

However, Ma visited a school he founded in Hangzhou on Monday to discuss education issues and ChatGPT technology.

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